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Matter of O’Hare (2013 NY Slip Op 05320).

The New York Appellate Division has suspended a lawyer from the practice of law for one year for creating an online profile on a lesbian dating site. The lawyer who is male was also convicted of attempted aggravated harassment.

The Court described the facts as follows: “The underlying facts, which are undisputed, are as follows: the respondent, using the internet, went to a dating site for lesbians and created a sham posting by impersonating a woman whom he knew years ago; he used both his home and work computers for this activity. The respondent was aware that the sham posting would likely cause embarrassment to the woman, who was a mother of three.”

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Recently, the undersigned encountered an arbitration clause drafted by a successful Chicago law firm.

I will quote the relevant language in full and then discuss what the language means for a client.  I am not in any way criticizing the clause or the lawyers who drafted it.

“This Agreement shall be construed under the laws of the State of Illinois and any disputes concerning the Agreement, our fees that relate in any way to our representation, including any claims relating to our billings for breach of fiduciary duty, professional negligence or malpractice or other disputes over our representation, shall be resolved under Illinois law in Chicago, Illinois through a summary procedure involving limited discovery in which we will jointly appoint a qualified arbitrator who specializes in such matters to promptly resolve any disputes through arbitration, whose decision shall be final and binding upon the parties.  These limitations shall be imposed on any arbitration: (i) five (5) depositions, thirty (30) interrogatories, forty (40) document requests and fifty (50) requests for admissions per side; (ii) pre-hearing briefs totaling fifteen (15) pages per side; (iii) post-hearing briefs totaling twenty-five (25) pages per side; (iv) no more than three (3) days for hearing testimony and argument. Because this procedure for dispute resolution involves a waiver of [Client’s] rights and ours, we jointly acknowledge that this alternative procedure for dispute resolution waives our respective rights to seek relief through litigation or to have a trial by jury or to conduct full discovery or to appeal or to otherwise exercise rights available in litigation, rather than through arbitration. It is therefore, important that this matter be carefully discussed with independent counsel and only after that review has been completed can we jointly agree to this alternative dispute-resolution procedure. In the event agreement cannot be reached on a suitable arbitrator, we shall jointly seek the assistance of the American Bar Association for the selection of a suitable person. (Emphasis supplied).

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GROCHOCINSKI v. MAYER BROWN ROWE & MAW, LLP, Court of Appeals, 7th Circuit 2013 – Google Scholar.

The Seventh Circuit has affirmed the dismissal of this legal malpractice case filed by a bankruptcy trustee against Mayer Brown Rowe and Maw.  This case has garnered some attention in the legal ethics press. The only problem with this case is that it is unique and it is unlikely to have any precedential value.

The case began with a contract dispute between Spehar Capital and CMGT, Inc., a start-up company with no assets to speak of. Mayer Brown represented CMGT. Mayer Brown’s only important task was to obtain financing for the CMGT.  The financing never materialized.

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Goldfine v. BARACK, FERRAZZANO, KIRSCHBAUM AND PERLMAN, Ill: Appellate Court, 1st Dist., 6th Div. 2013 – Google Scholar.

The Illinois Appellate Court, First District, Sixth Division, has affirmed a judgment entered in favor of the plaintiff and against a defendant law firm. The allegation of negligence was that the law firm failed to preserve the plaintiffs’ claims under the Illinois Securities laws against Shearson Lehman. In short, the alleged error was the failure to timely file a claim for rescission against Shearson Lehman.

In a legal malpractice case, the court must always begin with an analysis of the underlying transaction or the underlying lawsuit. Here, the plaintiffs had a valid claim under the Illinois Securities Laws against Shearson Lehman. Under the Illinois Securities Law, the purchaser has six months from the time he learns of the right of rescission. The law firm failed to serve the notice of rescission and the Illinois courts rejected the plaintiffs’ claims as time-barred.

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BEFORE THE HEARING BOARD.

This is a complaint filed by the ARDC, the Attorney Registration and Disciplinary Commission. The ARDC’s complaint alleges that an attorney, Tina Marie Jacobs, filed a foreclosure case against a homeowner. The ARDC alleges that the lawyer failed to provide the homeowner with a grace period notice required by the Illinois Code of Civil Procedure. The statute sets forth the exact text the grace period notice must contain:

“The notice required in this subsection (c) shall state the date on which the notice was mailed, shall be headed in bold 14-point type “GRACE PERIOD NOTICE”, and shall state the following in 14-point type: “YOUR LOAN IS MORE THAN 30 DAYS PAST DUE. YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY. IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING COUNSELING. YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS NOTICE TO OBTAIN APPROVED HOUSING COUNSELING. DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU. YOU MAY BE ENTITLED TO AN ADDITIONAL 30 DAY GRACE PERIOD IF YOU OBTAIN HOUSING COUNSELING FROM AN APPROVED HOUSING COUNSELING AGENCY. A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION.”

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VALUKAS v. BOTTI MARINACCIO, LTD, Dist. Court, ND Illinois 2013 – Google Scholar.

This is a decision dismissing a divorce malpractice claim on statute of limitations grounds. The plaintiff, James Valukas, hired the defendant law firm to represent him in his divorce. Valukas claimed that the law firm negligently drafted a marital settlement agreement, allowing his ex-wife to make a claim for a portion of the payout on certain stock options.

Defendant raised a statute of repose defense, arguing that the alleged error occurred outside of the limitations period. The statute of repose bars any claim against an attorney that occurred more than 6 years prior to the filing of the lawsuit.

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Filed June 12.

The respondent, an attorney, was the President and Treasurer of her condo association. She allegedly used $5,666.29 in condominium funds for personal purchases. The Condominium association apparently reported her to the ARDC which filed a complaint. The Hearing Board states that the respondent had $175,000 in student loans.

This is another example of a lawyer engaging in misconduct in non-legal duties and suffering punishment as a result. Also, the conversion was extremely easy to prove because the association’s funds were used for personal items.

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KLINGELHOEFER v. PARKER, GROSSART, BAHENSKY & BEUCKE, LLP, 20 Neb. App. 825 – Neb: Court of Appeals 2013 – Google Scholar.

This case concerns whether a member of an LLC can sue for legal malpractice the lawyers who represented the entity. The Nebraska Court of Appeals held that the plaintiff, Donald Klingelhoefer, lacked standing to sue.

Nebraska follows the traditional rule that the shareholder of a corporation or member of a limited liability company lacks standing because the corporation or LLC suffered the injury, not the shareholder or member.

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BEFORE THE HEARING BOARD.

This is a disciplinary complaint filed by the ARDC against a lawyer. The ARDC alleges that the 93 year old client entrusted $80,000 to the lawyer. The lawyer used $79,963 of the funds for his own expenses and did not use any of the money for the benefit of the elderly client. Elder abuse is a fast-growing area of the attorney discipline regime.

This is a complaint only. It has not been proven. If true, it is a dreadful story.

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This case is a somewhat routine affirmance of a bank fraud conviction and the rejection of an ineffective assistance of counsel claim. The Defendant alleged that her lawyer rendered ineffective assistance of counsel by failing to call certain witnesses at the trial of the case. In the criminal world, an ineffective assistance claim is equivalent in many ways to a legal malpractice claim. If there is a finding of ineffective assistance of counsel, the defendant is sometimes entitled to a new trial.

Here, the defendant fired her lawyers, but was assisted by stand by counsel at her trial. Counsel decided not to call certain witnesses because the potential risk of their negative testimony far outweighed the potential reward. This case makes it clear that these decisions are for the lawyer to make at trial, except in unusual circumstances.  The Seventh Circuit explains the rules applicable to witness testimony issues: “A “lawyer’s decision to call or not to call a witness is a strategic decision generally not subject to review. The Constitution does not oblige counsel to present each and every witness that is suggested to him.” United States v. Best, 426 F.3d 937, 945 (7th Cir. 2005) (quoting United States v. Williams, 106 F.3d 1362, 1367 (7th Cir. 1997)). Indeed, Parker acknowledges that the decision whether to call a witness was her attorney’s to make.”

Comment: the point here is that it is almost impossible to win a legal malpractice case on the ground that the lawyer failed to call a witness. That decision was the lawyer’s to make in his professional judgment.

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